The coherence of the narcissist's dysfunctional and precariously-balanced personality depends on the plausibility of his stories and on their acceptance by his Sources of Narcissistic Supply. The narcissist invests an inordinate time in substantiating his tales, collecting "evidence", defending his version of events, and in re-interpreting reality to fit his scenario. As a result, most narcissists are self-delusional, obstinate, opinionated, and argumentative.
The narcissist's lies are not goal-orientated. This is what makes his constant dishonesty both disconcerting and incomprehensible. The narcissist lies at the drop of a hat, needlessly, and almost ceaselessly. He lies in order to avoid the Grandiosity Gap - when the abyss between fact and (narcissistic) fiction becomes too gaping to ignore.
The narcissist lies in order to preserve appearances, uphold fantasies, support the tall (and impossible) tales of his False Self and extract Narcissistic Supply from unsuspecting sources, who are not yet on to him. To the narcissist, confabulation is not merely a way of life - but life itself.
(From the book "Malignant Self-love: Narcissism Revisited" by Sam Vaknin - Click on this link to purchase: http://www.narcissistic-abuse.com/thebook.html)